State Bank of India (SBI) has launched Unified Payments Interface (UPI) interoperability on Central Bank Digital Currency (CBDC). Before SBI, Yes Bank, HDFC Bank and Axis Bank have also started UPI interoperability on CBDC under the name Mobile Digital Rupee.
SBI customers can now use the funds in their CBDC wallet to make digital rupee transactions between themselves by scanning a ‘UPI QR code’. There is no need to change the existing QR code for this service. This decision will make it easier for people to make digital payments.
What is Central Bank Digital Currency (CBDC)?
CBDC It is a digital version of a country’s fiat currency (such as the rupee or dollar). It is issued by the central bank and also guarantees it. It is completely different from blockchain based cryptocurrency. Cryptocurrency is decentralised, it is not issued by any government or any regulatory authority. Whereas CBDC currency is issued by central bank RBI and monitors it.
There are many objectives behind introducing digital currency such as controlling private virtual currency, making digital payments easier and curbing illegal activities. After SBI, Yes Bank, HDFC Bank and Axis Bank, now other banks will also start services based on CBDC.
CBDC stands for Central Bank Digital Currency. It is a digital form of a country’s national currency that is issued and regulated by the central bank. CBDC is designed to be a digital representation of a nation’s official currency.
No, CBDC (Central Bank Digital Currency) is not the same as cryptocurrencies like Bitcoin or Ethereum. While both are digital forms of currency, CBDC is issued and regulated by a central bank, making it a centralized digital currency. Cryptocurrencies, on the other hand, are decentralized and operate on blockchain technology without direct control from a central authority.
The CBDC (Digital Rupee or E-Rupee) was launched on 1 December 2022 in India.
State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.
Yes, a CBDC is a legal tender issued by a central bank (RBI) in a digital form.
No, CBDC is a type of digital currency, while a UPI is a payment system that can be used to make digital payments using various forms of currency.